Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 28, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BAKER HUGHES INC | |
Entity Central Index Key | 808,362 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 437,913,730 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Sales | $ 1,013 | $ 1,528 |
Services | 1,657 | 3,066 |
Total revenue | 2,670 | 4,594 |
Costs and expenses: | ||
Cost of sales | 944 | 1,345 |
Cost of services | 1,714 | 2,997 |
Research and engineering | 102 | 138 |
Marketing, general and administrative | 207 | 287 |
Impairment and restructuring charges | 160 | 573 |
Merger and related costs | 102 | 28 |
Total costs and expenses | 3,229 | 5,368 |
Operating loss | (559) | (774) |
Interest expense, net | (55) | (54) |
Loss before income taxes | (614) | (828) |
Income taxes | (367) | 235 |
Net loss | (981) | (593) |
Net loss attributable to noncontrolling interests | 0 | 4 |
Net loss attributable to Baker Hughes | $ (981) | $ (589) |
Basic and diluted loss per share attributable to Baker Hughes | $ (2.22) | $ (1.35) |
Cash dividends per share | $ 0.17 | $ 0.17 |
Consolidated Condensed Stateme3
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (981) | $ (593) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments during the period | 65 | (171) |
Pension and other postretirement benefits, net of tax | 2 | 7 |
Other comprehensive income (loss) | 67 | (164) |
Comprehensive loss | (914) | (757) |
Comprehensive loss attributable to noncontrolling interests | 0 | 4 |
Comprehensive loss attributable to Baker Hughes | $ (914) | $ (753) |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 2,192 | $ 2,324 |
Accounts receivable - less allowance for doubtful accounts (2016 - $431; 2015 - $383) | 2,800 | 3,217 |
Inventories, net | 2,789 | 2,917 |
Deferred income taxes | 208 | 301 |
Other current assets | 782 | 509 |
Total current assets | 8,771 | 9,268 |
Property, plant and equipment - less accumulated depreciation (2016 - $7,647; 2015 - $7,378) | 6,323 | 6,693 |
Goodwill | 6,074 | 6,070 |
Intangible assets, net | 549 | 583 |
Other assets | 1,219 | 1,466 |
Total assets | 22,936 | 24,080 |
Current liabilities: | ||
Accounts payable | 1,153 | 1,409 |
Short-term debt and current portion of long-term debt | 162 | 151 |
Accrued employee compensation | 507 | 690 |
Income taxes payable | 176 | 55 |
Other accrued liabilities | 464 | 470 |
Total current liabilities | 2,462 | 2,775 |
Long-term debt | 3,885 | 3,890 |
Deferred income taxes and other tax liabilities | 375 | 252 |
Liabilities for pensions and other postretirement benefits | 650 | 646 |
Other liabilities | $ 162 | $ 135 |
Commitments and contingencies | ||
Equity: | ||
Common stock | $ 438 | $ 437 |
Capital in excess of par value | 7,281 | 7,261 |
Retained earnings | 8,559 | 9,614 |
Accumulated other comprehensive loss | (938) | (1,005) |
Treasury stock | (21) | (9) |
Baker Hughes stockholders’ equity | 15,319 | 16,298 |
Noncontrolling interests | 83 | 84 |
Total equity | 15,402 | 16,382 |
Total liabilities and equity | $ 22,936 | $ 24,080 |
Consolidated Condensed Balance5
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 431 | $ 383 |
Accumulated depreciation | $ 7,647 | $ 7,378 |
Consolidated Condensed Stateme6
Consolidated Condensed Statements of Changes in Equity - USD ($) $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interests |
Balance at Dec. 31, 2014 | $ 18,730 | $ 434 | $ 7,062 | $ 11,878 | $ (749) | $ 0 | $ 105 |
Comprehensive loss: | |||||||
Net loss | (593) | (589) | $ (4) | ||||
Other comprehensive income | (164) | (164) | |||||
Activity related to stock plans | (8) | 1 | (2) | (7) | |||
Stock-based compensation | 33 | 33 | |||||
Cash dividends | (75) | (75) | |||||
Net activity related to noncontrolling interests | (10) | (10) | |||||
Balance at Mar. 31, 2015 | 17,913 | 435 | 7,083 | 11,214 | (913) | (7) | $ 101 |
Balance at Dec. 31, 2015 | 16,382 | 437 | 7,261 | 9,614 | (1,005) | (9) | $ 84 |
Comprehensive loss: | |||||||
Net loss | (981) | (981) | |||||
Other comprehensive income | 67 | 67 | |||||
Activity related to stock plans | (25) | 1 | (14) | (12) | |||
Stock-based compensation | 34 | $ 34 | |||||
Cash dividends | (74) | (74) | |||||
Net activity related to noncontrolling interests | (1) | $ (1) | |||||
Balance at Mar. 31, 2016 | $ 15,402 | $ 438 | $ 7,281 | $ 8,559 | $ (938) | $ (21) | $ 83 |
Consolidated Condensed Stateme7
Consolidated Condensed Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends per share | $ 0.17 | $ 0.17 |
Consolidated Condensed Stateme8
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (981) | $ (593) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 354 | 460 |
Impairment of assets | 118 | 240 |
Provision (benefit) for deferred income taxes | 359 | (183) |
Provision for doubtful accounts | 48 | 105 |
Other noncash items | (3) | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 386 | 809 |
Inventories | 149 | 177 |
Accounts payable | (263) | (627) |
Other operating items, net | (266) | (135) |
Net cash flows provided by (used in) operating activities | (99) | 256 |
Cash flows from investing activities: | ||
Expenditures for capital assets | (86) | (315) |
Proceeds from disposal of assets | 82 | 81 |
Proceeds from maturities of investment securities | 202 | 0 |
Purchases of investment securities | (137) | 0 |
Other investing items, net | 0 | (3) |
Net cash flows provided by (used in) investing activities | 61 | (237) |
Cash flows from financing activities: | ||
Net repayments of short-term debt and other borrowings | (5) | (54) |
Dividends paid | (74) | (75) |
Other financing items, net | (16) | (17) |
Net cash flows used in financing activities | (95) | (146) |
Effect of foreign exchange rate changes on cash and cash equivalents | 1 | (7) |
Decrease in cash and cash equivalents | (132) | (134) |
Cash and cash equivalents, beginning of period | 2,324 | 1,740 |
Cash and cash equivalents, end of period | 2,192 | 1,606 |
Supplemental cash flows disclosures: | ||
Income taxes paid, net of refunds | 85 | 124 |
Interest paid | 70 | 72 |
Supplemental disclosure of noncash investing activities: | ||
Capital expenditures included in accounts payable | $ 32 | $ 139 |
Summary of Significant Accounti
Summary of Significant Accounting Policies - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Baker Hughes Incorporated ("Baker Hughes," "Company," "we," "our," or "us,") is a leading supplier of oilfield services, products, technology and systems used for drilling, formation evaluation, completion and production, pressure pumping, and reservoir development in the worldwide oil and natural gas industry. We also provide products and services for other businesses including downstream chemicals, and process and pipeline services. Basis of Presentation Our unaudited consolidated condensed financial statements included herein have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America ("U.S.") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K/A for the year ended December 31, 2015 . We believe the unaudited consolidated condensed financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the Notes to Unaudited Consolidated Condensed Financial Statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. Beginning in 2016, all merger and related costs are presented as a separate line item in the consolidated condensed statement of income (loss). Prior year merger and related costs were reclassified from cost of sales and cost of services; research and engineering costs; and marketing, general and administrative costs to conform to the current year presentation. New Accounting Standards Adopted In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which requires inventory measured using average cost methods, which we utilize, to be subsequently measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Currently, inventory is required to be subsequently measured at the lower of cost or market with market defined as replacement cost, net realizable value or net realizable value less a normal profit margin. We have elected to early adopt this guidance as of January 1, 2016 because we believe this approach will reduce the complexity in the subsequent measurement of our inventory. The guidance stipulates that the amendments in ASU No. 2015-11 shall be adopted on a prospective basis, therefore our adoption had no impact on prior reporting periods. New Accounting Standards To Be Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and is to be applied retrospectively. Early adoption is permitted. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, and may be applied either prospectively or retrospectively. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases , a new standard on accounting for leases. The ASU introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in the current accounting guidance as well as the FASB's new revenue recognition standard. However, the ASU eliminates the use of bright-line tests in determining lease classification as required in the current guidance. The ASU also requires additional qualitative disclosures along with specific quantitative disclosures to better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The pronouncement is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, using a modified retrospective approach. Early adoption is permitted. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting . The standard provides a new requirement to record all of the tax effects related to share-based payments at settlement (or expiration) through the income statement. This pronouncement is effective for annual reporting periods beginning after December 15, 2016. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. |
Halliburton Merger Agreement (N
Halliburton Merger Agreement (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Halliburton Merger Agreement | HALLIBURTON MERGER AGREEMENT On November 16, 2014, Baker Hughes, Halliburton Company ("Halliburton") and a wholly owned subsidiary of Halliburton ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), under which Halliburton would acquire all of the outstanding shares of Baker Hughes through a merger of Baker Hughes with and into Merger Sub (the "Merger"). In accordance with the provisions of Section 9.1 of the Merger Agreement, Baker Hughes and Halliburton agreed to terminate the Merger Agreement on April 30, 2016, as a result of the failure of the Merger to occur on or before April 30, 2016 due to the inability to achieve certain specified antitrust related approvals. Halliburton has agreed to pay $3.5 billion to Baker Hughes, on or before May 4, 2016, representing the antitrust termination fee required to be paid pursuant to the Merger Agreement. Baker Hughes incurred costs related to the Merger of $102 million and $28 million for the three months ended March 31, 2016 and 2015, respectively, including costs under our retention programs and obligations for minimum incentive compensation costs which, based on meeting eligibility criteria, have been treated as merger and related expenses. |
Impairment and Restructuring Ch
Impairment and Restructuring Charges - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | IMPAIRMENT AND RESTRUCTURING CHARGES IMPAIRMENT CHARGES We conduct impairment tests on long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable based on estimated future cash flows. In the first quarter of 2016, oil prices fell to a twelve year low. Additionally, we experienced a continued decline in customer spending as our customers finalized their capital spending budgets for 2016 given the current outlook for a prolonged downturn. We considered these events to be possible impairment indicators and performed testing of long-lived assets for impairment. As a result of our testing, certain machinery and equipment, with a total carrying value of $203 million , was written down to its estimated fair value, resulting in an impairment charge of $106 million . Additionally, certain customer relationship intangible assets, with a total carrying value of $29 million , were written down to their estimated fair values, resulting in an impairment charge of $12 million . Total impairment charges for the first quarter of 2016 were $118 million . The majority of the impaired machinery and equipment and intangible assets related to our businesses in Russia Caspian and in Asia Pacific. The estimated fair values for these assets were determined using discounted future cash flows. The significant level 3 unobservable inputs used in the determination of the fair value of these assets were the estimated future cash flows and the weighted average cost of capital of 15.0% for Russia Caspian and 13.5% for Asia Pacific. RESTRUCTURING CHARGES Throughout 2015 and during the first quarter of 2016, we have taken actions to restructure and adjust our operations and cost structure to reflect current and expected activity levels. These restructuring activities included workforce reductions, contract terminations, facility closures and the removal of excess machinery and equipment that resulted in asset impairments. Depending on future market conditions and activity levels, further actions may be necessary to adjust our operations, which may result in additional charges. During the three months ended March 31, 2016 and 2015 , we recorded restructuring charges as summarized below: Three Months Ended Three Months Ended Restructuring Charges March 31, 2016 March 31, 2015 Workforce reductions $ 47 $ 247 Contract terminations — 86 Impairment of buildings and improvements (5 ) 77 Impairment of machinery and equipment — 163 Total restructuring charges $ 42 $ 573 Workforce reduction costs : During 2015, we initiated workforce reductions that resulted in the elimination of approximately 18,000 positions worldwide. As of December 31, 2015, we had $81 million accrued severance remaining to be paid. In the first three months of 2016 , we initiated workforce reductions that will result in the elimination of approximately 2,000 additional positions worldwide. As a result of this action, we recorded a charge for severance expense of $47 million . During the first quarter of 2016, we made payments totaling $77 million relating to workforce reductions. We expect that substantially all of the accrued severance remaining will be paid by the middle of 2016. Contract termination costs: During the first three months of 2015 , we incurred costs of $86 million for various contracts being terminated, primarily in North America. As of December 31, 2015 , we had accrued contract termination costs of $26 million remaining to be paid. During the first quarter of 2016, we made payments totaling $16 million relating to contract termination costs. Impairment of buildings and improvements: During 2015, we consolidated facilities and shut down certain operations, and as a result, we recognized $77 million of impairment charges in the first quarter of 2015 related to facilities primarily in North America and Latin America. Impairment of machinery and equipment: During 2015 we exited or substantially downsized our presence in select markets primarily in our pressure pumping product line in North America and Latin America, and as a result, we recognized $163 million of impairment losses in the first quarter of 2015 to adjust the carrying value of certain machinery and equipment to its fair value, net of costs to dispose. OTHER CHARGES In addition to the matters described above, during the first three months of 2016 , we recorded a loss on a firm purchase commitment of $51 million in North America. This loss is reported in cost of services. During the first three months of 2015 , we recorded charges of $171 million , of which $29 million is reported in cost of sales and $142 million is reported in cost of services, to write-down the carrying value of certain inventory. The write-down, primarily in North America, includes lower of cost or market adjustments due to the significant decline in activity and related prices for our products coupled with declines in replacement costs. In addition, the adjustments include provisions for excess inventory levels based on estimates of current and future market demand. The product lines impacted are primarily pressure pumping and drilling and completion fluids. |
Segment Information - (Notes)
Segment Information - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We are a supplier of oilfield services, products, technology and systems used in the worldwide oil and natural gas business, referred to as oilfield operations, which are managed through operating segments that are aligned with our geographic regions. We also provide services and products to the downstream chemicals, and process and pipeline services, referred to as Industrial Services. The performance of our operating segments is evaluated based on profit (loss) before tax, which is defined as income (loss) before income taxes and before the following: net interest expense, corporate expenses and certain gains and losses, including impairment and restructuring charges, not allocated to the operating segments. Beginning in 2016, we excluded merger and related costs from our operating segments. These costs are now presented as a separate line item in the consolidated condensed statement of income (loss). Prior year merger and related costs have been reclassified to conform to the current year presentation. Summarized financial information is shown in the following tables: Three Months Ended Three Months Ended March 31, 2016 March 31, 2015 Segments Revenue Profit (Loss) Before Taxes Revenue Profit (Loss) Before Taxes North America $ 819 $ (225 ) $ 2,006 $ (209 ) Latin America 277 (66 ) 493 33 Europe/Africa/Russia Caspian 611 (19 ) 895 (20 ) Middle East/Asia Pacific 718 49 916 62 Industrial Services 245 (4 ) 284 10 Total Operations 2,670 (265 ) 4,594 (124 ) Corporate — (32 ) — (49 ) Interest expense, net — (55 ) — (54 ) Impairment and restructuring charges — (160 ) — (573 ) Merger and related costs — (102 ) — (28 ) Total $ 2,670 $ (614 ) $ 4,594 $ (828 ) |
Income Taxes - (Notes)
Income Taxes - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the three months ended March 31, 2016 , total income tax expense was $367 million on a loss before income taxes of $614 million , resulting in a negative effective tax rate of 59.8% , driven primarily by $502 million of valuation allowances. Due to the significant downturn in the U.S. market during the three months ended March 31, 2016 and uncertainty as to whether the U.S. will generate sufficient future taxable income to utilize the U.S. deferred tax assets, we concluded that valuation allowances were required. The valuation allowances are recorded against various deferred tax assets, including U.S. federal tax credit carryforwards ( $164 million ), foreign ( $110 million ) and state ( $15 million ) net operating losses ("NOL"), and certain U.S. deferred tax assets ( $213 million ). In addition, we currently intend to carryback the 2015 NOL and 2016 expected NOL resulting in a $427 million reduction to the beginning of year U.S. deferred tax assets and a $484 million increase in tax receivables, of which $324 million is reflected as a current income tax receivable recorded in other current assets in the consolidated condensed balance sheet. |
Earnings Per Share - (Notes)
Earnings Per Share - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE A reconciliation of the number of shares used for the basic and diluted loss per share computations is as follows: Three Months Ended March 31, 2016 2015 Weighted average common shares outstanding for basic and diluted loss per share 442 437 Anti-dilutive shares excluded from diluted loss per share (1) — 2 Future potentially dilutive shares excluded from diluted loss per share (2) 7 3 (1) The calculation of diluted loss per share for the three months ended March 31, 2016 and 2015 excludes shares potentially issuable under stock-based incentive compensation plans and the employee stock purchase plan, as their effect, if included, would have been anti-dilutive. (2) Options where the exercise price exceeds the average market price are excluded from the calculation of diluted net loss or earnings per share because their effect would be anti-dilutive. |
Inventories - (Notes)
Inventories - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory, Net [Abstract] | |
Inventories | INVENTORIES Inventories, net of reserves of $275 million at March 31, 2016 and $278 million at December 31, 2015 , are comprised of the following: March 31, December 31, Finished goods $ 2,524 $ 2,649 Work in process 139 132 Raw materials 126 136 Total inventories $ 2,789 $ 2,917 |
Intangible Assets - (Notes)
Intangible Assets - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS Intangible assets are comprised of the following: March 31, 2016 December 31, 2015 Gross Carrying Amount Less: Accumulated Amortization Net Gross Carrying Amount Less: Accumulated Amortization Net Technology $ 867 $ 467 $ 400 $ 866 $ 452 $ 414 Customer relationships (1) 209 83 126 251 106 145 Trade names 108 90 18 108 89 19 Other 18 13 5 18 13 5 Total intangible assets $ 1,202 $ 653 $ 549 $ 1,243 $ 660 $ 583 (1) During the first quarter of 2016, we recorded impairments relating to our customer relationship intangible assets totaling $12 million . See Note 3. "Impairment and Restructuring Charges" for further discussion. Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 3 to 30 years. Amortization expense for the three months ended March 31, 2016 was $22 million , as compared to $26 million reported in 2015 for the same period. Amortization expense of these intangibles over the remainder of 2016 and for each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense Remainder of 2016 $ 63 2017 81 2018 74 2019 71 2020 61 2021 53 |
Financial Instruments - (Notes)
Financial Instruments - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS Our financial instruments include cash and cash equivalents, accounts receivable, investments, accounts payable, debt and foreign currency forward contracts. Except as described below, the estimated fair value of such financial instruments at March 31, 2016 and December 31, 2015 approximates their carrying value as reflected in our unaudited consolidated condensed balance sheets. The estimated fair value of total debt at March 31, 2016 and December 31, 2015 was $4,347 million and $4,321 million , respectively, which differs from the carrying amounts of $4,047 million and $4,041 million , respectively, included in our unaudited consolidated condensed balance sheets. The fair value was determined using quoted period-end market prices. |
Employee Benefit Plans - (Notes
Employee Benefit Plans - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefits Plans | EMPLOYEE BENEFIT PLANS We have both funded and unfunded noncontributory defined benefit pension plans ("Pension Benefits") covering certain employees primarily in the U.S., the United Kingdom, Germany and Canada. We also provide certain postretirement health care benefits ("Other Postretirement Benefits"), through an unfunded plan, to a closed group of U.S. employees who, when they retire, have met certain age and service requirements. The components of net periodic cost (benefit) are as follows for the three months ended March 31 : U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits 2016 2015 2016 2015 2016 2015 Service cost $ 13 $ 18 $ 4 $ 4 $ 1 $ 1 Interest cost 7 7 7 8 1 1 Expected return on plan assets (10 ) (13 ) (9 ) (12 ) — — Amortization of prior service credit — — — — (2 ) (3 ) Amortization of net actuarial loss 3 2 1 1 — 1 Curtailment gain — — — — — (9 ) Net periodic cost (benefit) $ 13 $ 14 $ 3 $ 1 $ — $ (9 ) Expected Cash Flows For all pension plans, we make annual contributions to the plans in amounts equal to or greater than amounts necessary to meet minimum governmental funding requirements. During the three months ended March 31, 2016 , we contributed approximately $7 million to our defined benefit and other postretirement plans. We have revised our expected contributions and accordingly, we expect to contribute between $51 million and $55 million to our funded and unfunded pension plans and to make payments of between $11 million and $15 million related to other postretirement benefits for the remainder of 2016. We contributed approximately $49 million to our defined contribution plans during the three months ended March 31, 2016 . Effective April 2016, employer contributions to certain plans were suspended indefinitely. Accordingly, we have revised our expected contributions and now estimate we will contribute between $38 million and $40 million to our defined contribution plans for the remainder of 2016. |
Commitments and Contingencies -
Commitments and Contingencies - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES LITIGATION We are subject to a number of lawsuits and claims arising out of the conduct of our business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, including accruals for self-insured losses which are calculated based on historical claim data, specific loss development factors and other information. A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on a consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of any currently pending lawsuits or claims against us will have a material adverse effect on our financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. The following lawsuits were filed in Delaware in connection with our Merger with Halliburton. Subsequent to the filing of the lawsuits, on April 30, 2016, the Merger Agreement with Halliburton was terminated as described in Note 2. "Halliburton Merger Agreement." • On November 24, 2014, Gary Molenda, a purported shareholder of the Company, filed a class action lawsuit in the Court of Chancery of the State of Delaware ("Delaware Chancery Court") against Baker Hughes, the Company’s Board of Directors, Halliburton, and Red Tiger LLC, a wholly owned subsidiary of Halliburton ("Red Tiger" and together with all defendants, "Defendants") styled Gary R. Molenda v. Baker Hughes, Inc., et al. , Case No. 10390-CB. • On November 26, 2014, a second purported shareholder of the Company, Booth Family Trust, filed a substantially similar class action lawsuit in Delaware Chancery Court. • On December 1, 2014, New Jersey Building Laborers Annuity Fund and James Rice, two additional purported shareholders of the Company, filed substantially similar class action lawsuits in Delaware Chancery Court. • On December 10, 2014, a fifth purported shareholder of the Company, Iron Workers Mid-South Pension Fund, filed another substantially similar class action lawsuit in the Delaware Chancery Court. • On December 24, 2014, a sixth purported shareholder of the Company, Annette Shipp, filed another substantially similar class action lawsuit in the Delaware Chancery Court. All of the lawsuits make substantially similar claims. The plaintiffs generally allege that the members of the Company’s Board of Directors breached their fiduciary duties to our shareholders in connection with the Merger negotiations by entering into the Merger Agreement and by approving the Merger, and that the Company, Halliburton, and Red Tiger aided and abetted the purported breaches of fiduciary duties. More specifically, the lawsuits allege that the Merger Agreement provides inadequate consideration to our shareholders, that the process resulting in the Merger Agreement was flawed, that the Company’s directors engaged in self-dealing, and that certain provisions of the Merger Agreement improperly favor Halliburton and Red Tiger, precluding or impeding third parties from submitting potentially superior proposals, among other things. The lawsuit filed by Annettee Shipp also alleges that our Board of Directors failed to disclose material information concerning the proposed Merger in the preliminary registration statement on Form S-4. On January 7, 2015, James Rice amended his complaint, adding similar allegations regarding the disclosures in the preliminary registration statement on Form S-4. The lawsuits seek unspecified damages, injunctive relief enjoining the Merger, and rescission of the Merger Agreement, among other relief. On January 23, 2015, the Delaware lawsuits were consolidated under the caption In re Baker Hughes Inc. Stockholders Litigation, Consolidated C.A. No. 10390-CB (the "Consolidated Case"). Pursuant to the Court’s consolidation order, plaintiffs filed a consolidated complaint on February 4, 2015, which alleges substantially similar claims and seeks substantially similar relief to that raised in the six individual complaints, except that while Baker Hughes is named as a defendant, no claims are asserted against the Company. On March 18, 2015, the parties reached an agreement in principle to settle the Consolidated Case in exchange for the Company making certain additional disclosures. Those disclosures were contained in a Form 8-K filed with the SEC on March 18, 2015. The settlement was made subject to certain conditions, including consummation of the Merger, final documentation, and court approval. With the termination of the Merger Agreement with Halliburton, the March 18, 2015 settlement agreement is rendered null and void. On October 9, 2014, our subsidiary filed a Request for Arbitration against a customer before the London Court of International Arbitration, pursuing claims for the non-payment of invoices for goods and services provided in an amount provisionally quantified to exceed $67.9 million . In our Request for Arbitration, we also noted that invoices in an amount exceeding $57 million had been issued to the customer, and would be added to the claim in the event that they became overdue. On November 6, 2014, the customer filed its Response and Counterclaim, denying liability and counterclaiming damages for breach of contract of approximately $182 million . On March 31, 2016, the parties agreed to a settlement principally involving the purchase by the customer of certain inventory held by our subsidiary, with all other claims and counterclaims being released and discharged by each party, and the arbitral proceedings being discontinued. During 2014, we received customer notifications related to a possible equipment failure in a natural gas storage system in Northern Germany, which includes certain of our products. We are currently investigating the cause of the possible failure and, if necessary, possible repair and replacement options for our products. Similar products were utilized in other natural gas storage systems for this and other customers. The customer initiated arbitral proceedings against us on June 19, 2015, under the rules of the German Institute of Arbitration e.V. (DIS). The customer alleges damages of approximately $170 million plus interest at an annual rate of prime + 5% . The hearing before the arbitration panel is scheduled to commence on January 16, 2017. In addition, on September 21, 2015, TRIUVA Kapitalverwaltungsgesellschaft mbH filed a lawsuit in the United States District Court for the Southern District of Texas, Houston Division against the Company and Baker Hughes Oilfield Operations, Inc. alleging that the plaintiff is the owner of gas storage caverns in Etzel, Germany in which the Company provided certain equipment in connection with the development of the gas storage caverns. The plaintiff further alleges that the Company supplied equipment that was either defectively designed or failed to warn of risks that the equipment posed, and that these alleged defects caused damage to the plaintiff’s property. The plaintiff seeks recovery of alleged compensatory and punitive damages of an unspecified amount, in addition to reasonable attorneys’ fees, court costs and pre-judgment and post-judgment interest. The allegations in this lawsuit are related to the claims made in the June 19, 2015 German arbitration referenced above. At this time, we are not able to predict the outcome of these claims or whether either will have any material impact on our financial position, results of operations or cash flows. On August 31, 2015, a customer of one of the Company’s subsidiaries issued a Letter of Claim pursuant to a Construction and Engineering Contract. The customer has claimed $369 million plus loss of production resulting from a breach of contract related to five electric submersible pumps installed by the subsidiary in Europe. On January 29, 2016, the Customer served its Statement of Claim, Case No. CL-2015-00584, in the Commercial Court Queen's Bench Division of the High Court of Justice. Investigation is ongoing as to the merits of the claim. At this time, we are not able to predict the outcome of this claim or whether it will have a material impact on our financial position, results of operations or cash flows. On October 30, 2015, Chieftain Sand and Proppant Barron, LLC initiated arbitration against our subsidiary, Baker Hughes Oilfield Operations, Inc., in the American Arbitration Association. The Claimant alleges that the Company failed to purchase the required sand tonnage for the contract year 2014-2015 and further alleges that the Company repudiated its yearly purchase obligations over the remaining contract term. The Claimant alleges damages of approximately $110 million plus interest, attorneys’ fees and costs. The hearing before the arbitration panel is scheduled to commence on September 27, 2016. The Company intends to vigorously defend the claim. At this time, we are not able to predict the outcome of this claim or whether it will have a material impact on our financial position, results of operations or cash flows. On April 30, 2015, a class and collective action lawsuit alleging that we failed to pay a nationwide class of workers overtime in compliance with the Fair Labor Standards Act and North Dakota law was filed titled Williams et al. v. Baker Hughes Oilfield Operations, Inc. in the U.S. District Court for the District of North Dakota. On February 8, 2016, the Court conditionally certified certain subclasses of employees for collective action treatment. We are evaluating the background facts and at this time cannot predict the outcome of this lawsuit and are not able to reasonably estimate the potential impact, if any, such outcome would have on our financial position, results of operations or cash flows. On July 31, 2015, Rapid Completions LLC filed a lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc., and others claiming infringement of U.S. Patent Nos. 6,907,936; 7,134,505; 7,543,634; 7,861,774; and 8,657,009. On August 6, 2015, Rapid Completions amended its complaint to allege infringement of U.S. Patent No. 9,074,451. On September 17, 2015, Rapid Completions and Packers Plus Energy Services Inc., sued Baker Hughes Canada Company in the Canada Federal Court on related Canadian patent 2,412,072. On April 1, 2016, Rapid Completions removed U.S. Patent No. 6,907,936 from its claims in the lawsuit. On April 5, 2016, Rapid Completions filed a second lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc. and others claiming infringement of U.S. Patent No. 9,303,501. These patents relate primarily to certain specific downhole completions equipment. The plaintiff has requested a permanent injunction against further alleged infringement, damages in an unspecified amount, supplemental and enhanced damages, and additional relief such as attorney’s fees and costs. At this time, we are not able to predict the outcome of these claims or whether they will have a material impact on our financial position, results of operations or cash flows. On April 6, 2016, a civil Complaint against Baker Hughes Incorporated and Halliburton Company was filed by the United States of America seeking a permanent injunction restraining Baker Hughes and Halliburton from carrying out the planned acquisition of Baker Hughes by Halliburton or any other transaction that would combine the two companies. The lawsuit is styled United States of America v. Halliburton Co. and Baker Hughes Inc. , in the U.S. District Court for the District of Delaware, Case No. 1:16-cv-00233-UNA. The Complaint alleges that the proposed transaction between Halliburton and Baker Hughes would violate Section 7 of the Clayton Act. Subsequent to the filing of the Complaint, on April 30, 2016, the Merger Agreement with Halliburton was terminated as described in Note 2. "Halliburton Merger Agreement." OTHER In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees, which totaled approximately $1.2 billion at March 31, 2016 . It is not practicable to estimate the fair value of these financial instruments. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss - (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables present the changes in accumulated other comprehensive loss, net of tax: Pensions and Other Postretirement Benefits Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ (261 ) $ (744 ) $ (1,005 ) Other comprehensive income before reclassifications 1 65 66 Amounts reclassified from accumulated other comprehensive loss 2 — 2 Deferred taxes (1 ) — (1 ) Balance at March 31, 2016 $ (259 ) $ (679 ) $ (938 ) Pensions and Other Postretirement Benefits Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2014 $ (246 ) $ (503 ) $ (749 ) Other comprehensive income (loss) before reclassifications 13 (171 ) (158 ) Amounts reclassified from accumulated other comprehensive loss (10 ) — (10 ) Deferred taxes 4 — 4 Balance at March 31, 2015 $ (239 ) $ (674 ) $ (913 ) The amounts reclassified from accumulated other comprehensive loss during the three months ended March 31, 2016 and 2015 represent the amortization of prior service credit, net actuarial loss, curtailment gain and certain other items which are included in the computation of net periodic cost (benefit). See Note 10. "Employee Benefit Plans" for additional details. Net periodic cost (benefit) is recorded in cost of sales and services, research and engineering, and marketing, general and administrative expenses. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENT As discussed in Note 2. "Halliburton Merger Agreement," Baker Hughes and Halliburton agreed to terminate the Merger Agreement on April 30, 2016. The accompanying financial statements were prepared assuming that the Merger would proceed to completion. We have not completed an evaluation of the impact, if any, that the termination of the Merger Agreement may have on our consolidated financial statements. Any effects of the termination of the Merger Agreement on our consolidated financial statements would be reflected prospectively. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Baker Hughes Incorporated ("Baker Hughes," "Company," "we," "our," or "us,") is a leading supplier of oilfield services, products, technology and systems used for drilling, formation evaluation, completion and production, pressure pumping, and reservoir development in the worldwide oil and natural gas industry. We also provide products and services for other businesses including downstream chemicals, and process and pipeline services. |
Basis of Presentation | Basis of Presentation Our unaudited consolidated condensed financial statements included herein have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America ("U.S.") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K/A for the year ended December 31, 2015 . We believe the unaudited consolidated condensed financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the Notes to Unaudited Consolidated Condensed Financial Statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. Beginning in 2016, all merger and related costs are presented as a separate line item in the consolidated condensed statement of income (loss). Prior year merger and related costs were reclassified from cost of sales and cost of services; research and engineering costs; and marketing, general and administrative costs to conform to the current year presentation. |
New Accounting Standards Updates | New Accounting Standards Adopted In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which requires inventory measured using average cost methods, which we utilize, to be subsequently measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Currently, inventory is required to be subsequently measured at the lower of cost or market with market defined as replacement cost, net realizable value or net realizable value less a normal profit margin. We have elected to early adopt this guidance as of January 1, 2016 because we believe this approach will reduce the complexity in the subsequent measurement of our inventory. The guidance stipulates that the amendments in ASU No. 2015-11 shall be adopted on a prospective basis, therefore our adoption had no impact on prior reporting periods. New Accounting Standards To Be Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and is to be applied retrospectively. Early adoption is permitted. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, and may be applied either prospectively or retrospectively. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases , a new standard on accounting for leases. The ASU introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in the current accounting guidance as well as the FASB's new revenue recognition standard. However, the ASU eliminates the use of bright-line tests in determining lease classification as required in the current guidance. The ASU also requires additional qualitative disclosures along with specific quantitative disclosures to better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The pronouncement is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, using a modified retrospective approach. Early adoption is permitted. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting . The standard provides a new requirement to record all of the tax effects related to share-based payments at settlement (or expiration) through the income statement. This pronouncement is effective for annual reporting periods beginning after December 15, 2016. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. |
Impairment and Restructuring 23
Impairment and Restructuring Charges - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | During the three months ended March 31, 2016 and 2015 , we recorded restructuring charges as summarized below: Three Months Ended Three Months Ended Restructuring Charges March 31, 2016 March 31, 2015 Workforce reductions $ 47 $ 247 Contract terminations — 86 Impairment of buildings and improvements (5 ) 77 Impairment of machinery and equipment — 163 Total restructuring charges $ 42 $ 573 |
Segment Information - (Tables)
Segment Information - (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |
Summarized financial information | Summarized financial information is shown in the following tables: Three Months Ended Three Months Ended March 31, 2016 March 31, 2015 Segments Revenue Profit (Loss) Before Taxes Revenue Profit (Loss) Before Taxes North America $ 819 $ (225 ) $ 2,006 $ (209 ) Latin America 277 (66 ) 493 33 Europe/Africa/Russia Caspian 611 (19 ) 895 (20 ) Middle East/Asia Pacific 718 49 916 62 Industrial Services 245 (4 ) 284 10 Total Operations 2,670 (265 ) 4,594 (124 ) Corporate — (32 ) — (49 ) Interest expense, net — (55 ) — (54 ) Impairment and restructuring charges — (160 ) — (573 ) Merger and related costs — (102 ) — (28 ) Total $ 2,670 $ (614 ) $ 4,594 $ (828 ) |
Earnings Per Share - (Tables)
Earnings Per Share - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares | A reconciliation of the number of shares used for the basic and diluted loss per share computations is as follows: Three Months Ended March 31, 2016 2015 Weighted average common shares outstanding for basic and diluted loss per share 442 437 Anti-dilutive shares excluded from diluted loss per share (1) — 2 Future potentially dilutive shares excluded from diluted loss per share (2) 7 3 (1) The calculation of diluted loss per share for the three months ended March 31, 2016 and 2015 excludes shares potentially issuable under stock-based incentive compensation plans and the employee stock purchase plan, as their effect, if included, would have been anti-dilutive. (2) Options where the exercise price exceeds the average market price are excluded from the calculation of diluted net loss or earnings per share because their effect would be anti-dilutive. |
Inventories - (Tables)
Inventories - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory, Net [Abstract] | |
Inventories, net of reserves | Inventories, net of reserves of $275 million at March 31, 2016 and $278 million at December 31, 2015 , are comprised of the following: March 31, December 31, Finished goods $ 2,524 $ 2,649 Work in process 139 132 Raw materials 126 136 Total inventories $ 2,789 $ 2,917 |
Intangible Assets - (Tables)
Intangible Assets - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets are comprised of the following: March 31, 2016 December 31, 2015 Gross Carrying Amount Less: Accumulated Amortization Net Gross Carrying Amount Less: Accumulated Amortization Net Technology $ 867 $ 467 $ 400 $ 866 $ 452 $ 414 Customer relationships (1) 209 83 126 251 106 145 Trade names 108 90 18 108 89 19 Other 18 13 5 18 13 5 Total intangible assets $ 1,202 $ 653 $ 549 $ 1,243 $ 660 $ 583 (1) During the first quarter of 2016, we recorded impairments relating to our customer relationship intangible assets totaling $12 million . See Note 3. "Impairment and Restructuring Charges" for further discussion. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense of these intangibles over the remainder of 2016 and for each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense Remainder of 2016 $ 63 2017 81 2018 74 2019 71 2020 61 2021 53 |
Employee Benefit Plans - (Table
Employee Benefit Plans - (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Net Benefit Costs | The components of net periodic cost (benefit) are as follows for the three months ended March 31 : U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits 2016 2015 2016 2015 2016 2015 Service cost $ 13 $ 18 $ 4 $ 4 $ 1 $ 1 Interest cost 7 7 7 8 1 1 Expected return on plan assets (10 ) (13 ) (9 ) (12 ) — — Amortization of prior service credit — — — — (2 ) (3 ) Amortization of net actuarial loss 3 2 1 1 — 1 Curtailment gain — — — — — (9 ) Net periodic cost (benefit) $ 13 $ 14 $ 3 $ 1 $ — $ (9 ) |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | The following tables present the changes in accumulated other comprehensive loss, net of tax: Pensions and Other Postretirement Benefits Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ (261 ) $ (744 ) $ (1,005 ) Other comprehensive income before reclassifications 1 65 66 Amounts reclassified from accumulated other comprehensive loss 2 — 2 Deferred taxes (1 ) — (1 ) Balance at March 31, 2016 $ (259 ) $ (679 ) $ (938 ) Pensions and Other Postretirement Benefits Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2014 $ (246 ) $ (503 ) $ (749 ) Other comprehensive income (loss) before reclassifications 13 (171 ) (158 ) Amounts reclassified from accumulated other comprehensive loss (10 ) — (10 ) Deferred taxes 4 — 4 Balance at March 31, 2015 $ (239 ) $ (674 ) $ (913 ) |
Halliburton Merger Agreement (D
Halliburton Merger Agreement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Combinations [Abstract] | ||
Halliburton merger termination fee maximum | $ 3,500 | |
Merger and related costs | $ 102 | $ 28 |
Impairment and Restructuring 31
Impairment and Restructuring Charges - (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016USD ($)Employee | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Severance | $ 81 | ||
Loss on firm purchase commitment | $ 51 | ||
Restructuring Costs | 42 | $ 573 | |
Restructuring reserve, contract termination | $ 26 | ||
Inventory Write-down | 171 | ||
Inventory Write Down-Cost of Sales | 29 | ||
Inventory Write Down-Cost of Services | 142 | ||
Impairment of assets | 118 | 240 | |
Workforce reductions | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | $ 47 | 247 | |
Restructuring and Related Cost, Number of Positions Eliminated | Employee | 2,000 | ||
Payments for Restructuring | $ 77 | ||
Contract terminations | |||
Restructuring Cost and Reserve [Line Items] | |||
Other Restructuring Costs | 0 | 86 | |
Payments for Restructuring | 16 | ||
Impairment of buildings and improvements | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of Long-Lived Assets Held-for-use | (5) | 77 | |
Impairment of machinery and equipment | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of Long-Lived Assets Held-for-use | 0 | $ 163 | |
Machinery and Equipment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Carrying Amount of Impaired Long-Lived Assets, Held-for-use | 203 | ||
Impairment of Long-Lived Assets Held-for-use | 106 | ||
Customer Relationships and Trade Names [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Carrying Amount of Intangible Assets, Finite-Lived | 29 | ||
Impairment of Intangible Assets, Finite-lived | $ 12 | ||
Russia Caspian [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Fair Value Assumptions, Weighted Average Cost of Capital | 15.00% | ||
Asia Pacific [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Fair Value Assumptions, Weighted Average Cost of Capital | 13.50% |
Segment Information - (Details)
Segment Information - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Summarized financial information [Abstract] | ||
Revenue | $ 2,670 | $ 4,594 |
Profit (Loss) Before Taxes | (614) | (828) |
Corporate | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | (32) | (49) |
Interest expense, net | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | (55) | (54) |
Impairment and restructuring charges | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | (160) | (573) |
Merger and related costs | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | (102) | (28) |
North America | ||
Summarized financial information [Abstract] | ||
Revenue | 819 | 2,006 |
Profit (Loss) Before Taxes | (225) | (209) |
Latin America | ||
Summarized financial information [Abstract] | ||
Revenue | 277 | 493 |
Profit (Loss) Before Taxes | (66) | 33 |
Europe/Africa/Russia Caspian | ||
Summarized financial information [Abstract] | ||
Revenue | 611 | 895 |
Profit (Loss) Before Taxes | (19) | (20) |
Middle East/Asia Pacific | ||
Summarized financial information [Abstract] | ||
Revenue | 718 | 916 |
Profit (Loss) Before Taxes | 49 | 62 |
Industrial Services | ||
Summarized financial information [Abstract] | ||
Revenue | 245 | 284 |
Profit (Loss) Before Taxes | (4) | 10 |
Total Operations | ||
Summarized financial information [Abstract] | ||
Revenue | 2,670 | 4,594 |
Profit (Loss) Before Taxes | $ (265) | $ (124) |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Increase (Decrease) in Deferred Income Taxes | $ (427) | |
Income taxes (benefit) | (367) | $ 235 |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | $ (614) | $ (828) |
Effective Income Tax Rate Reconciliation, Percent | 59.80% | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 502 | |
Valuation Allowance, U.S. Federal Tax Credit Carryforwards, Increase (Decrease), Amount | 164 | |
Valuation Allowance, Foreign NOLs, Increase (Decrease), Amount | 110 | |
Valuation Allowance, State NOLs, Increase (Decrease), Amount | 15 | |
Valuation Allowance, Other U.S. Deferred Tax Assets, Increase (Decrease), Amount | 213 | |
Increase (Decrease) in Income Taxes Receivable | 484 | |
Increase (Decrease) in Income Taxes Receivable, Current | $ 324 |
Earnings Per Share - (Details)
Earnings Per Share - (Details) - shares shares in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average common shares outstanding for basic and diluted loss per share | 442 | 437 | |
Anti-dilutive shares excluded from diluted loss per share (1) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from diluted loss per share (1) | [1] | 0 | 2 |
Future potentially dilutive shares excluded from diluted loss per share (2) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from diluted loss per share (1) | [2] | 7 | 3 |
[1] | The calculation of diluted loss per share for the three months ended March 31, 2016 and 2015 excludes shares potentially issuable under stock-based incentive compensation plans and the employee stock purchase plan, as their effect, if included, would have been anti-dilutive. | ||
[2] | Options where the exercise price exceeds the average market price are excluded from the calculation of diluted net loss or earnings per share because their effect would be anti-dilutive. |
Inventories - (Details)
Inventories - (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory, Net [Abstract] | ||
Inventory Valuation Reserves | $ 275 | $ 278 |
Finished goods | 2,524 | 2,649 |
Work in process | 139 | 132 |
Raw materials | 126 | 136 |
Total inventories | $ 2,789 | $ 2,917 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets by Type (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 1,202 | $ 1,243 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 653 | 660 | |
Finite-Lived Intangible Assets, Net | 549 | 583 | |
Customer Relationships and Trade Names [Member] | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | |||
Impairment of Intangible Assets, Finite-lived | 12 | ||
Technology-Based Intangible Assets | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 867 | 866 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 467 | 452 | |
Finite-Lived Intangible Assets, Net | 400 | 414 | |
Customer Relationships | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 209 | [1] | 251 |
Finite-Lived Intangible Assets, Accumulated Amortization | 83 | [1] | 106 |
Finite-Lived Intangible Assets, Net | 126 | [1] | 145 |
Trade Names | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 108 | 108 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 90 | 89 | |
Finite-Lived Intangible Assets, Net | 18 | 19 | |
Other Intangible Assets | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 18 | 18 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 13 | 13 | |
Finite-Lived Intangible Assets, Net | $ 5 | $ 5 | |
[1] | During the first quarter of 2016, we recorded impairments relating to our customer relationship intangible assets totaling $12 million. See Note 3. "Impairment and Restructuring Charges" for further discussion. |
Intangible Assets - Schedule 37
Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Millions | Mar. 31, 2016USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of 2016 | $ 63 |
2,017 | 81 |
2,018 | 74 |
2,019 | 71 |
2,020 | 61 |
2,021 | $ 53 |
Intangible Assets - Textual Inf
Intangible Assets - Textual Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense for intangible assets included in net income | $ 22 | $ 26 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 30 years |
Financial Instruments - (Detail
Financial Instruments - (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Debt, fair value | $ 4,347 | $ 4,321 |
Debt, Long-term and Short-term, Combined Amount | $ 4,047 | $ 4,041 |
Employee Benefit Plans - (Detai
Employee Benefit Plans - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Components of net periodic benefit cost [Abstract] | ||
Defined Benefit Plan, Contributions by Employer | $ 7 | |
Defined Contribution Plan, Cost Recognized | 49 | |
U.S. Pension Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 13 | $ 18 |
Interest cost | 7 | 7 |
Expected return on plan assets | (10) | (13) |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial loss | 3 | 2 |
Curtailment gain | 0 | 0 |
Net periodic cost | 13 | 14 |
Non-U.S. Pension Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 4 | 4 |
Interest cost | 7 | 8 |
Expected return on plan assets | (9) | (12) |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial loss | 1 | 1 |
Curtailment gain | 0 | 0 |
Net periodic cost | 3 | 1 |
Other Postretirement Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 1 | 1 |
Interest cost | 1 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credit | (2) | (3) |
Amortization of net actuarial loss | 0 | 1 |
Curtailment gain | 0 | (9) |
Net periodic cost | 0 | $ (9) |
Minimum [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Defined Contribution Plan, Estimated Future Employer Contributions in Current Fiscal Year | 38 | |
Minimum [Member] | Pension Plan [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | 51 | |
Minimum [Member] | Other Postretirement Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | 11 | |
Maximum [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Defined Contribution Plan, Estimated Future Employer Contributions in Current Fiscal Year | 40 | |
Maximum [Member] | Pension Plan [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | 55 | |
Maximum [Member] | Other Postretirement Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | $ 15 |
Commitments and Contingencies41
Commitments and Contingencies - (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | |
Claims amount for terminated contract | $ 67.9 |
Additional claim amount for terminated contract | 57 |
Breach of contract counter suit amount | 182 |
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability | 1,200 |
Natural Gas Storage System in Northern Germany [Member] | |
Loss Contingencies [Line Items] | |
Loss Contingency, Damages Sought, Value | $ 170 |
Loss Contingency, Damages Sought, interest rate | 5.00% |
Construction and Engineering Contract in Europe [Member] | |
Loss Contingencies [Line Items] | |
Loss Contingency, Damages Sought, Value | $ 369 |
Chieftain Sand and Proppant Barron Arbitration [Member] | |
Loss Contingencies [Line Items] | |
Loss Contingency, Damages Sought, Value | $ 110 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Loss - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | $ (1,005) | $ (749) |
Other comprehensive income before reclassifications | 66 | (158) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 2 | (10) |
Deferred taxes | (1) | 4 |
Ending Balance | (938) | (913) |
Pensions and Other Postretirement Benefits | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | (261) | (246) |
Other comprehensive income before reclassifications | 1 | 13 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 2 | (10) |
Deferred taxes | (1) | 4 |
Ending Balance | (259) | (239) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | (744) | (503) |
Other comprehensive income before reclassifications | 65 | (171) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 |
Deferred taxes | 0 | 0 |
Ending Balance | $ (679) | $ (674) |